Quote was buried within a Bloomberg piece on JP Morgan's conference call...

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Source - JPM Conference Call

While Dimon called the U.S. housing market still “terrible,” he said it’s better than it was a year ago. The bank put $1.5 billion in litigation reserves to cover costs related to buying back faulty mortgages. It also set aside $2.1 billion more against soured loans from Washington Mutual, the lender JPMorgan bought in 2008.

Dimon said most of the new litigation reserves are intended for so-called private-label mortgages, which are not insured by the federal government or federally controlled mortgage companies Fannie Mae and Freddie Mac. He said it will take years to resolve those disputes and to determine the ultimate cost to JPMorgan.

“It’s going to be a long ugly mess, but it won’t be life- threatening to JPMorgan,” he told analysts on a separate call. “We will be talking about this for every quarter over the next three years.”

Anti-poverty campaigners renewed their call for new taxes on the financial sector after JP Morgan Chase set aside almost $10bn to cover basic pay and bonuses for its investment banking division.

The Robin Hood Tax campaign said it was "outrageous" that JP Morgan Chase's investment bankers are to receive an average payout of $369,651 (£233,000) for 2010. The group, which supports a global tax on banks' financial transactions, said the size of the payments were "a slap in the face to ordinary people".

"If banks can afford to pay billions in bonuses, they can clearly afford to be taxed a great deal more. A £20bn Robin Hood tax in the UK would help avoid the worst of the cuts and show we are all in this together," said David Hillman, spokesman for the Robin Hood Tax campaign.

“There have been six or seven municipal bankruptcies already,” Dimon, 54, said yesterday at his company’s annual health-care conference in San Francisco. “I think unfortunately you will see more.”

Cities including Detroit and Harrisburg, Pennsylvania, have raised the prospect of bankruptcy. Still, the number of filings has declined. Five municipal entities sought protection in 2010 compared with 10 in 2009, according to data compiled by James Spiotto, head of the bankruptcy practice at Chapman & Cutler, a Chicago law firm. The biggest last year was a South Carolina toll road with more than $300 million in debt, he said.

U.S. states will contend with about $140 billion in deficits in the next fiscal year, the Center on Budget and Policy Priorities, a Washington research group, said in a report issued Dec. 16. Edmund “Ted” Kelly, CEO of Liberty Mutual Holding Co., said yesterday that his firm had reduced holdings of municipal debt in Connecticut, California and Illinois.

“The market is being held up to some extent by the belief that the federal government will bail out” state and local issuers, Kelly said in an interview.

Reader Comments (5)

Anti-poverty campaigners renewed their call for new taxes on the financial sector after JP Morgan Chase set aside almost $10bn to cover basic pay and bonuses for its investment banking division.

The Robin Hood Tax campaign said it was "outrageous" that JP Morgan Chase's investment bankers are to receive an average payout of $369,651 (£233,000) for 2010. The group, which supports a global tax on banks' financial transactions, said the size of the payments were "a slap in the face to ordinary people".

"If banks can afford to pay billions in bonuses, they can clearly afford to be taxed a great deal more. A £20bn Robin Hood tax in the UK would help avoid the worst of the cuts and show we are all in this together," said David Hillman, spokesman for the Robin Hood Tax campaign.

“It’s going to be a long ugly mess, but it won’t be life- threatening to JPMorgan,”

As long as our government is ready and willing to hand out bail-outs, JPMorgan will never face a "life-threatening" event. And seeing that JPMorgan IS our government, it will always be ready to give itself a bail-out!

JPM Chase walks away from the wreckage in real estate and municipal funding as if banking had had nothing to do with any of the problems. You suppose bankers are greasing the wheels of healthcare as well as they did real estate? Think the probs in municipal funding aren't mirrored in healthcare? Think that part of the problem with "affording" healthcare is that it is another bankster blackhole of profiteering? Do we have to wait for another financial meltdown before we even consider the inherent problems of making another vital societal service a private profit machine?